Many large businesses maintain full sets of accounting records through fully-fledged accounting functions complete with adequate segregation of duties set up within their establishments. Accounting departments in large businesses routinely provide managers with much needed financial information to facilitate business monitoring and control and also for enabling them to make sound business decisions.
Establishing a proper functioning in-house accounting unit requires recruitment and retention of highly qualified and skilled personnel whose affordability is very often out of reach for small and medium enterprises.
This reality reigns despite the fact that sound financial business decision whether in large, small and medium enterprises results in better profitability and business growth. Rudimental financial records maintained in-house by small businesses often to monitor amounts owned by customers and amounts owed to suppliers fall too far short of providing financial information needed to make sound business decisions which are all financial in nature.
Without accurate and reliable financial information upon which to make sound business decisions, many businesses fold at inception or early in the growth path. So what options are available to small and medium enterprises to access good accurate and reliable financial information? Before this question is answered it is important to know that small and medium enterprises can be placed into two main groups which are subsistence and growth-oriented entities.
Entities in each group will have different needs for financial information.
Very often entities in the subsistence group will need financial information to assist them in monitoring dues from and to the entity. The other major purpose is to enable them to file their tax returns and pay any taxes if any and which is a lot of occasions they try to avoid.
Many of the subsistence businesses are owners managed entities formed as income substitution Ventures.
They are designed to provide the owner with funding for his or her living and often do not outlive the proprietor. Financial decisions in these entities are invariably made on the rule of the thumb or seat of the pants basis. On the other hand, growth-oriented entities are initiated and operated by committed entrepreneurs whose aim is to develop or terminate their careers in entrepreneurship. They are motivated by every element of growth in the entities, however small.
These entrepreneurs frequently interrogate their financial numbers looking for evidence for growth in their business.
They are avid consumers of financial information and often get very frustrated when they cannot access, good accurate and reliable financial information that they can rely on to make informed financial decisions over and above using the same to monitor and control their businesses.
Due to the sheer size of the entity and economic considerations, establishing a proper accounting function in such business is not feasible, yet the entrepreneur cum business manager needs good, accurately complete and reliable financial information to enable him/her makes informed business decisions that would result in the profitability and growth.
In this regard, a very practical option available to the entrepreneur is to outsource the bookkeeping and accounting function to the professional service provider in good standing. In this way, the entrepreneur will have access to well qualified and skilled accountants from the contacted firm at an affordable price.
With the advancement in technology, a well-resourced accounting firm like XCloud Gen is able to offer the entrepreneur seamless support in matters relating to financial accounting preparation of management account for business control and financial decision making.